Enabling Enterprise – the government role

Statistics show that most jobs are created by small-to medium-sized enterprises (SMEs) and micro-SMEs. Although most governments know this, it is much easier for them – and for donor agencies – to make single investments in large companies and industrial zones’ than to support a diverse range of micro-SMEs and ‘necessity entrepreneurs.’ However, with the latter creating five to 10 more livelihoods than the former, they must find ways to reach out and support those at the bottom of the pyramid. Some governments have done this:

RWANDA – improving business regulation systems: In many LEDCs there are severe disincentives to registering your company, be they in terms of time, cost or complexity. In Rwanda, the Office of the Registrar General has set up an online business registration service to combine all registration requirements under one roof. With one application you register your business and obtain a company code that also serves as tax identification number (TIN). There is no minimum share capital required for company incorporation, and no taxes to pay.

NAMIBIA – A Systems Approach: In Namibia, the government has set up a National Youth Directorate with the goal of empowering youth through entrepreneurship training, skills development and active youth participation in responsive youth programmes. The Directorate includes the Namibian Youth Credit Scheme (NYCS), a loan guarantee programme aimed at providing loans of N$ 2 000 to N$ 20 000 to youth that do not have adequate collateral to access credit from the mainstream banking system. Operated through both
individual and group lending systems, the loans are paid back with interest of no more than 20%, and beneficiaries are offered follow-up training, counselling and mentoring in business management practices. The Directorate delivers one-year training courses to out-of-school, unemployed young people who do not meet the basic entry requirements of conventional vocational training centres. A tuition fee of N$ 300 to N$ 700 is payable upon registration.

Australia – a Systems Approach to skills-matching: Originally designed as a way of encouraging immigration, the ‘Points-based Australia’s Skill-Matching System’ is used to match suitable skillsets to jobs available. The online assessment calculates whether each applicant has enough points to be eligible to immigrate to Australia under one of the Skilled Visa classes.

Policy Strengthening:  The Commonwealth Secretariat and UN Conference on Trade and Development (UNCTAD) have created a Policy Guide to Youth Entrepreneurship that explores key areas such as access to finance, youth-friendly regulatory systems, entrepreneurship education, ICT, and the importance of supportive networks. In partnership with UNCTAD, International Labour Organization (ILO), YBI and other key youth entrepreneurship players, the Commonwealth is now using the guide to build the capacity of governments to create and strengthen national policies and strategies for youth entrepreneurship. They have worked with senior government officials from 18 countries in Africa, and are planning similar programming for the Pacific region in spring 2017.